Jindal Poly Films reports 126% CAPEX growth in 2016 while 4.2% Revenue decline
30-05-2016 • About Jindal Poly Films (
$JINDPOLBBPH) • By InTwits
Jindal Poly Films reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is quite volatile: 14.1% in FY2016, 8.8% in FY2015, 8.1% in FY2014, 6.5% in FY2013, 14.8% in FY2012
- Jindal Poly Films has medium CAPEX intensity: 5 year average CAPEX/Revenue was 9.4%. At the same time it's a lot of higher than industry average of 6.1%.
- CAPEX is quite volatile: ₹5,257m in FY2016, ₹2,321m in FY2015, ₹14,136m in FY2014, ₹467m in FY2013, ₹1,641m in FY2012
- The company has highly profitable business model: ROIC is 15.1%
- It operates with medium-size leverage: Net Debt/EBITDA is 1.8x while industry average is 1.8x
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Jindal Poly Films's Revenue decreased on 4.2%. During FY2012-FY2016 Revenue growth topped in FY2014 at 132% and was decelerating since that time. Revenue decline happened at the same time with EBITDA margin expansion. EBITDA Margin increased on 5.3 pp from 8.8% to 14.1% in FY2016. During FY2012-FY2016 EBITDA Margin bottomed in FY2013 at 6.5% and was growing since that time.
SG&A as a % of Revenue showed almost no change in FY2016.
Net Income margin increased on 2.9 pp from 2.3% to 5.1% in FY2016. During FY2012-FY2016 Net Income margin bottomed in FY2013 at 0.27% and was growing since that time.
Investments (CAPEX, working capital and M&A)
In FY2016 the company had CAPEX/Revenue of 7.3%. Jindal Poly Films's CAPEX/Revenue increased on 5.2 pp from 2.1% in FY2013 to 7.3% in FY2016. For the last three years the average CAPEX/Revenue was 12.6%. Jindal Poly Films invested a big chunk of EBITDA (51.7%) to CAPEX which didn't stop revenue from falling.
Return on investment
The company operates at good ROIC (15.1%) and ROE (17.8%). ROIC increased on 5.4 pp from 9.6% to 15.1% in FY2016. ROE increased on 7.8 pp from 10.0% to 17.8% in FY2016. During the last 5 years ROIC bottomed in FY2013 at 2.4% and was growing since that time. During FY2012-FY2016 ROE bottomed in FY2013 at 0.42% and was growing since that time.
Leverage (Debt)
Debt level is 1.8x Net Debt / EBITDA and 1.9x Debt / EBITDA. Net Debt / EBITDA dropped on 0.8x from 2.7x to 1.8x in FY2016. Debt increased on 5.6% while cash increased on 3.4%. During the last 5 years Net Debt/EBITDA topped in FY2013 at 4.0x and was declining since that time.
Jindal Poly Films has short term refinancing risk: cash is only 15.3% of short term debt.
Valuation and dividends
Jindal Poly Films's trades at EV/EBITDA 3.8x and P/E 5.4x while industy averages are 17.8x and 21.9x. The company's EV/(EBITDA-CAPEX) is 7.8x with the industry average at 22.8x.
Management team
Jindal Poly Films's CFO Manoj Gupta has spent 5 years with the company.
Financial and operational results
Jindal Poly Films ($JINDPOLBBPH) key annual financial indicators| mln. INR | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 23,644 | 22,155 | 51,324 | 75,386 | 72,256 | -4.2% |
| SG&A | | | | 123 | 99 | -19.3% |
| EBITDA | 3,507 | 1,430 | 4,181 | 6,597 | 10,167 | 54.1% |
| Net Income | 1,350 | 60 | 781 | 1,722 | 3,711 | 115.5% |
Balance Sheet
|
|---|
| Cash | 135 | 67 | 1,260 | 1,073 | 1,109 | 3.4% |
| Short Term Debt | 2,642 | 3,855 | 6,103 | 6,411 | 7,269 | 13.4% |
| Long Term Debt | 2,566 | 1,959 | 9,498 | 12,294 | 12,489 | 1.6% |
Cash flow
|
|---|
| Capex | 1,641 | 467 | 14,136 | 2,321 | 5,257 | 126.5% |
Ratios
|
|---|
| Revenue growth | -17.2% | -6.3% | 131.7% | 46.9% | -4.2% | |
| EBITDA growth | -63.5% | -59.2% | 192.5% | 57.8% | 54.1% | |
|
|---|
| EBITDA Margin | 14.8% | 6.5% | 8.1% | 8.8% | 14.1% | 5.3% |
| SG&A, % of revenue | | | | 0.2% | 0.1% | -0.0% |
| Net Income Margin | 5.7% | 0.3% | 1.5% | 2.3% | 5.1% | 2.9% |
| CAPEX, % of revenue | 6.9% | 2.1% | 27.5% | 3.1% | 7.3% | 4.2% |
|
|---|
| ROIC | 11.1% | 2.4% | 7.5% | 9.6% | 15.1% | 5.4% |
| ROE | 8.1% | 0.4% | 5.6% | 10.0% | 17.8% | 7.8% |
| Net Debt/EBITDA | 1.4x | 4.0x | 3.4x | 2.7x | 1.8x | -0.8x |
Peers in Commodity Chemicals
Below you can find Jindal Poly Films benchmarking vs. other companies in Commodity Chemicals industry. It's shown for the period of 5 years for the key financial metrics. Each table has median value for all the companies in the industry together with individual financial data of the top-5 companies in the industry by particular financial metric.
Top companies by Revenue growth, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Andhra Petrochemicals ($ANDHRAPET) | - | -5.8% | -53.9% | -45.9% | 139.3% |
| Iol Chemicals & Pharmaceuticals ($IOLCP) | - | 2.3% | 17.0% | -31.7% | 49.1% |
| Tuticorin Alkali Chemicals & Fertilisers ($TUTIALKA) | - | -27.9% | -83.3% | 408.0% | 18.3% |
| Indo Amines ($INDOAMIN) | - | 4.4% | 10.7% | -2.6% | 17.2% |
| Godrej Industries ($GODREJIND) | - | 24.1% | 13.7% | 16.6% | 16.5% |
| |
|---|
| Median (32 companies) | 50.0% | 11.2% | 10.6% | 5.6% | -1.4% |
|---|
| Jindal Poly Films ($JINDPOLBBPH) | - | -6.3% | 131.7% | 46.9% | -4.2% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Riddhi Siddhi Gluco Biols ($RIDDHI) | - | - | - | 104.7% | - |
| Mysore Petro Chemicals ($MYSORPETRO) | - | - | - | 47.1% | - |
| Aditya Birla Chemicals (India) ($ABCIL) | 26.8% | 27.1% | 23.6% | 21.9% | - |
| Indo Borax & Chemicals ($INDOBORAX) | - | - | - | 21.3% | - |
| Chemfab Alkalis ($CHEMFALKAL) | 22.3% | 32.9% | 24.2% | 19.8% | 23.2% |
| |
|---|
| Median (50 companies) | 9.6% | 8.4% | 8.6% | 6.6% | 10.6% |
|---|
| Jindal Poly Films ($JINDPOLBBPH) | 14.8% | 6.5% | 8.1% | 8.8% | 14.1% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Kanoria Chemicals & Industries ($KANORICHEM) | 25.1% | 6.0% | 13.4% | 40.3% | 28.7% |
| Aarti Industries ($AARTIIND) | 8.0% | 11.2% | 11.0% | 10.4% | 16.8% |
| Alkyl Amines Chemicals ($ALKYLAMINE) | 5.1% | 6.6% | 5.9% | 8.6% | 7.3% |
| Andhra Sugars ($ANDHRSUGAR) | 5.3% | 4.2% | 3.2% | 4.0% | 6.5% |
| Transpek Industry ($TRANSPEK) | 4.9% | 4.0% | 4.3% | 3.2% | 6.0% |
| |
|---|
| Median (17 companies) | 5.2% | 7.2% | 5.4% | 3.3% | 4.7% |
|---|
| Jindal Poly Films ($JINDPOLBBPH) | 6.9% | 2.1% | 27.5% | 3.1% | 7.3% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Bodal Chemicals ($BODALCHEM) | -1.3% | 3.3% | 39.0% | 38.3% | 33.1% |
| Transpek Industry ($TRANSPEK) | -1.7% | 14.2% | 11.0% | 17.8% | 26.9% |
| Alkyl Amines Chemicals ($ALKYLAMINE) | 16.0% | 18.7% | 25.0% | 23.7% | 24.7% |
| Balaji Amines ($BALAMINES) | 19.3% | 16.1% | 15.6% | 16.5% | 21.2% |
| Thirumalai Chemicals ($TIRUMALCHM) | 13.0% | 23.2% | 12.5% | 5.3% | 21.2% |
| |
|---|
| Median (49 companies) | 9.0% | 9.8% | 9.9% | 7.9% | 12.7% |
|---|
| Jindal Poly Films ($JINDPOLBBPH) | 11.1% | 2.4% | 7.5% | 9.6% | 15.1% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Kanoria Chemicals & Industries ($KANORICHEM) | 5.2x | 9.6x | 3.5x | 9.4x | 10.1x |
| Godrej Industries ($GODREJIND) | 9.9x | 5.7x | 7.9x | 10.7x | 10.0x |
| Iol Chemicals & Pharmaceuticals ($IOLCP) | 5.8x | 4.5x | 3.7x | 35.4x | 8.8x |
| India Glycols ($INDIAGLYCO) | 4.8x | 3.7x | 8.5x | 14.2x | 6.7x |
| Tata Chemicals ($TATACHEM) | 2.7x | 2.4x | 3.6x | 2.3x | 3.2x |
| |
|---|
| Median (30 companies) | 2.6x | 3.0x | 0.8x | 0.9x | 1.0x |
|---|
| Jindal Poly Films ($JINDPOLBBPH) | 1.4x | 4.0x | 3.4x | 2.7x | 1.8x |
